Bloomberg News

Liberty Media to Combine Tracking Stocks, Increase Buybacks

November 18, 2011

(Updates with analyst comments from fourth paragraph.)

Nov. 17 (Bloomberg) -- Liberty Media Corp., the company controlled by billionaire John C. Malone, will combine tracking stocks of its Liberty Starz and Liberty Capital units and increase share buybacks to make the stock more appealing to investors.

The move, which will take place Nov. 28, will turn the tracking stocks into an asset-backed security, the company said today in a statement. After the conversion, Liberty Media will have two classes of common stock, which will trade on the Nasdaq Stock Market under the symbols LMCA and LMCB.

The company, based in Englewood, Colorado, said the change will increase liquidity and create a stronger currency for acquisitions, while eliminating a “tracker discount.” Liberty’s assets include the Starz pay-TV business. In August it invested $204 million in the book retailer Barnes & Noble Inc. Liberty executives are meeting with analysts and investors today in New York.

“By combining the tracking stocks, Liberty simplifies the share structure, gains better access to credit markets and likely increases liquidity in trading,” Paul Sweeney, a senior analyst with Bloomberg Industries in New York, said in an interview.

Shares Gain

Liberty Starz Class A shares gained 1.3 percent to $68.95 at 10:32 a.m. New York time. Liberty Capital Class A shares rose 0.8 percent to $78.30.

Liberty also said it raised a $1.5 billion senior-secured credit line and has “more opportunities to deploy it at a combined Liberty Media.” The company increased a repurchase authorization for Liberty Capital common stock to $1.25 billion.

Live Nation Entertainment Inc., where Liberty holds 21 percent of all shares outstanding, rose 10 percent to $8.85 at 2:17 p.m. in New York trading.

The credit line benefits Live Nation as Liberty is a “willing equity participant for future growth,” including mergers and acquisitions, Benjamin Mogil, an analyst at Stifel Nicolaus & Co., said in a report today.

Concert ticket sales increased in October and November, Michael Rapino, president and chief executive officer of Live Nation, said today at the Liberty event.

“There’s a sense now that the concert business has hit bottom and that Live Nation is well positioned when the industry rebounds,” Sweeney said. “They’ve also done a good job getting performers to accept smaller upfront payments.”

--With assistance from Brett Pulley in New York. Editors: Chris Staiti, Bruce Rule

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net; Anthony Palazzo at apalazzo@bloomberg.net


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